Tesla no longer 'biggest US autormaker' after $12 billion value drop

Industries2017-07-07

Tesla lost its place as the biggest US cautomaker by
market capitalization on Thursday, handing over the crown to General
Motors (GM), after a slump in share prices erased more than 12 billion
US dollars of Tesla&#39;s value.Around 1845 GMT, GM had a
market capitalization of 52.6 billion US dollars, about 1.9 billion
dollars more than the California-based electric car maker, which had
overtaken the Detroit-based auto manufacturer in April.&nbsp;Tesla
had a big edge over GM in market value as recently as June 30, but
shares reacted poorly to Tesla&#39;s latest car delivery figures.The CEO of the electric car giant Elon Musk announced on
Monday that Tesla would start producing its first mass-market Model 3
sedans on Friday, two weeks ahead of schedule, with the first deliveries
set for July 28. The Model 3, which targets the middle-class market
with a price of 35,000 US dollars, plays a crucial part in Tesla&#39;s
vision to bring electric cars to the mainstream.However,
analysts were instead fixated on the second quarter delivery pace,
which came in at 22,000 vehicles, less than the 23,655 forecast.Goldman Sachs, an American&nbsp;multinational&nbsp;finance
company, slashed its six-month price target on Tesla shares to 180 US
dollars from 190 US dollars per share on Wednesday, warning that demand
for the company&#39;s established cars was &quot;plateauing,&quot; pressuring profit
margins.Moreover, Tesla&#39;s Model S once again fell
short of the top rating in a key crash test by the Insurance Institute
for Highway Safety, the agency announced Thursday.Adding
to Tesla&#39;s woes, the company is facing a more crowded market after
Swedish rival Volvo announced Wednesday that it will phase out
production of conventional petrol-only cars from 2019, with all new
models to be either electric or hybrids.

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Tesla lost its place as the biggest US cautomaker by
market capitalization on Thursday, handing over the crown to General
Motors (GM), after a slump in share prices erased more than 12 billion
US dollars of Tesla's value.

Around 1845 GMT, GM had a
market capitalization of 52.6 billion US dollars, about 1.9 billion
dollars more than the California-based electric car maker, which had
overtaken the Detroit-based auto manufacturer in April.

Tesla
had a big edge over GM in market value as recently as June 30, but
shares reacted poorly to Tesla's latest car delivery figures.

The CEO of the electric car giant Elon Musk announced on
Monday that Tesla would start producing its first mass-market Model 3
sedans on Friday, two weeks ahead of schedule, with the first deliveries
set for July 28. The Model 3, which targets the middle-class market
with a price of 35,000 US dollars, plays a crucial part in Tesla's
vision to bring electric cars to the mainstream.

However,
analysts were instead fixated on the second quarter delivery pace,
which came in at 22,000 vehicles, less than the 23,655 forecast.

Goldman Sachs, an American multinational finance
company, slashed its six-month price target on Tesla shares to 180 US
dollars from 190 US dollars per share on Wednesday, warning that demand
for the company's established cars was "plateauing," pressuring profit
margins.

Moreover, Tesla's Model S once again fell
short of the top rating in a key crash test by the Insurance Institute
for Highway Safety, the agency announced Thursday.

Adding
to Tesla's woes, the company is facing a more crowded market after
Swedish rival Volvo announced Wednesday that it will phase out
production of conventional petrol-only cars from 2019, with all new
models to be either electric or hybrids.